ENERGY: Germany's rapid development of renewable energy

Germany expects, within 12 years, to generate more than a quarter of its electricity from renewable energy sources, such as solar panels, wind turbines and biogas. Patrick J. Byrne reports.

Aiming at the European Union's target of 20 per cent renewable energy by 2020, Germany was halfway there last year, generating electricity from solar panels, wind turbines and bio-gas.

The big impetus to Germany's investment in renewable energy — now running at around $US10 billion annually — was the year 2000's "feed-in law" which was implemented under the Renewable Energy Sources Act (known by its acronym EEG). It established that anyone who can produce renewable electricity can feed it into the electricity grid, receiving a premium price that is set for 20 years.

The "feed-in" tariff sets a price higher than the market rate for those feeding electricity into the grid, and differs depending on whether the electricity is generated from wind turbines, solar panels or bio-gas.

For all types of energy, the rate paid to small suppliers diminishes at 5 per cent annually over 20 years. The starting price, depending on the year of entry into the market, is then fixed for 20 years.

This encourages people to get in early and benefit from a higher rate.

There is a bias towards solar energy where electricity companies were initially required to buy power at about four times the daytime market rate.

Those who have invested in the earlier years have found that their investment has paid off within 10 years, which is better than putting money in the bank. Electricity companies charge consumers a higher rate for renewable energy. (BBC Radio 4, January 10, 2008).

Now 18 out of 27 European countries have feed-in tariffs.

By 2006, Germany was producing 11.5 per cent of its electricity needs from renewable energy, or about 56 terawatt-hours (or billion kilowatt-hours), of which:

While the larger share of renewable power has come from wind turbines, they have been subject to some of the same criticisms as in Australia. In some picturesque areas, they are regarded as an eyesore on the landscape.

While the EU target for renewable sources of energy is 20 per cent by 2020, Germany has set a target of 27 per cent by that time. It achieved 10 per cent renewable energy by 2006. It also plans to phase out nuclear-powered electricity generation by 2020.

The EEG feed-in laws have put in place incentives for thriving renewable energy industries, creating tens of thousands of jobs and a booming export sector.

The solar energy market has attracted the greatest interest. Despite clouds covering the skies for two-thirds of daylight hours, Germany has become the world's leading generator, producing 55 per cent of the world's solar power. Japan is the second biggest generator.

There are about 250,000 jobs in Germany's renewable energy sector. About 45,000 jobs are in solar power, and this is expected to increase to 200,000 jobs by 2020 (Reuters, July 7, 2008).

According to the Germany Federal Association of Solar Industry, there were 1.3 million solar panels — both solar electric and solar thermal — installed on buildings in Germany by 2006, increasing at 220,000 per year.

Of the 20 largest solar-panel-producing plants in the world, Germany has 15.

In 2006, German exports of solar panels made up 15 per cent of all world-wide sales, and were worth $US9.5 bn to the economy. Exports are growing at 20 per cent annually.

Matthias Machnick, an under-secretary for the German ministry of the environment, has acknowledged that his country cannot hope to compete in solar-power generation with countries that have virtually perpetual sunshine in daylight hours. However, Germany intends to capture the technology and become the world's leading exporter of solar panel equipment. (Washington Post, May 5, 2007).